Toll Brothers has purchased a Santa Clara shopping center with plans to convert the site into a housing development.
Acting through its Toll West Coast subsidiary, the company bought Bowers Plaza, located at 3155 El Camino Real in Santa Clara. The residential developer paid $16.5M for the retail complex from an undisclosed seller in an all-cash transaction, according to a report in the Mercury News.
According to plans Toll Brothers filed with Santa Clara County, the company is planning to build 60 residences on the 2.4-acre site, including 40 townhomes and 20 flats in a campus consisting of eight buildings that will be two-story or three-story structures.
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The city of Santa Clara already has given final approval to the project, which will be built at the corner of El Camino Real and Calabazas Avenue next to a creek. The shopping center, which in recent years included some offices as well as retail shops, will be demolished to make way for the housing development, the newspaper report said.
Toll Brothers, based in Fort Washington, PA, was as of 2020 the fifth largest home builder in the US based on homebuilding revenue. The company specializes in new luxury residential developments.
In recent years, Toll Brothers has expanded its luxury residential offerings to a rapidly expanding growth sector in senior living: Active Adult, aimed at 55+ demographic.
Regency by Toll Brothers Active Adult offers 55+ communities designed for active lifestyles, with social events, activities, and resort-style amenities that may include professional-caliber golf courses and clubhouses, onsite lifestyle directors, fully equipped fitness centers, tennis and pickleball, swimming pools, walking and biking trails.
Senior living owners, operators and developers eagerly are awaiting a "silver tsunami" of Baby Boomers who will begin entering the average age range for assisted living nationwide—the early 80s—in four years.
But the 70 million Boomers born between 1946 and 1964—with ages now ranging from 58 to 76—already are doing the wave: they're lifting the fortunes of an emerging rental property type that rapidly is becoming the hottest growth sector in senior housing.
Active adult rental properties are aiming for Boomers in their early 70s (68-74 is the average range), a demographic that skews younger than independent living and attracts people who are more active and have much lower acuity needs than the current residents of independent living facilities.
According to a report from NIC, active adult communities generally have higher rents than multifamily, lower expenses than independent living—requiring fewer employees and no nurses or medical certification—and long lengths of stay (the average turnover is 20%, compared to 50% for multifamily) that yield healthy margins in a stabilized asset.
From a valuation standpoint, active adult rental properties are being pegged between traditional independent living and conventional multifamily. Rent rates at active adult properties typically are 10% to 30% higher than comparable multifamily, and 20% to 50% lower than independent living properties in the same area, according to NIC.
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